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Judge in Apple e-book case denies stay of states' class-action suit

updated 10:10 pm EDT, Wed April 23, 2014

Latest in long string of denials may be appealed to higher court

Once again, US District Court Judge Denise Cote has denied an Apple motion -- this time asking that the court delay the class-action lawsuit brought by 33 states and various consumer groups while Apple appeals her original guilty verdict in the federal case that alleged Apple led a conspiracy to fix e-book prices. The states are hoping to get further damages from Apple, up to a possible $840 million if the judge triples the damages asked for due to a finding of willful guilt.

The states' trial will, unlike the federal one, be in front of a jury rather than a bench trial, offering Apple some slim hope of a better verdict. Judge Cote, whose verdict and tactics have been excoriated by outside legal analysts, found the company guilty of leading a conspiracy along with the major book publishers to cripple Amazon's monopoly in the e-book trade by using the "agency model," where publishers set the price, rather than Amazon's "loss leader" pricing as it tried to built up its nascent e-book and Kindle e-reader businesses.

Amazon and the rest of the e-bookstores have since adopted the "agency model" and have continued to flourish, though Amazon is now down to around 65 percent of the e-book business from its original 90-plus percent (and prices, after a brief rise, have once again lowered to pre-conspiracy levels). The Department of Justice accused Apple of attempting to "fix" e-book prices slightly higher than Amazon's predatory-pricing rate and that consumers suffered as a result, and the judge agreed -- despite the impossibility in existing antitrust law that vertical-market resellers cannot join, much less lead, a "horizontal" (all players in the same industry) conspiracy to fix prices.

Judge Cote denied the bid by Apple, saying that the trial has already been delayed once and should go forward. The trial was originally scheduled in May, but Judge Cote's decision to consolidate claims by various groups and states into a class-action -- again objected to by Apple, which argued that the plaintiffs could not show any actual harm -- required a delay for class notification.

Apple immediately appealed Judge Cote's expected denial to the 2nd US Circuit Court of Appeals, saying that the judge is pressing forward with both a federal damages as well as class-action lawsuit simultaneously, "despite the irreparable harm to Apple's reputation among its consumers if class notice is disseminated." It is asking the higher court to put a stop to the civil trial, at least until the appeal of the federal verdict is heard.

The publishers involved in the original case opted to settle with the Department of Justice despite strong protests of their innocence, paying $166 million in exchange for immunity from further litigation. They have since complained that Judge Cote's rulings in the first trial have caused them more harm and difficulty in encouraging diversity and competition in the industry, effectively handing back to Amazon an abusive near-monopoly.





by MacNN Staff

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Comments

  1. TheGreatButcher

    Mac Enthusiast

    Joined: 06-11-00

    The wicked witch continues her crusade.

  1. slapppy

    Fresh-Faced Recruit

    Joined: 03-23-08

    How long can this Judge continue to preside on this? She's clearly made up her mind before the trial began according to many reports before.

  1. Stuke

    Junior Member

    Joined: 02-11-05

    Somebody must have been was denied a refund/AppleCare exchange on her iPhone when it was discovered it was exposed to excessive moisture...years later...

    What a crock and mockery of the judicial system this judge represents. Good to see corruption is everywhere, and life marches on.

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